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Deciding whether to sell your home or lease it out involves the balancing and consideration of multiple priorities! This includes what your potential return on investment might be, as well as weighing your current financial and personal needs at this moment.
In this fantastic seller’s market, selling can obviously be quite the lucrative and attractive option. But of course, you still need to look at what you owe on the home, versus what your profit or loss will be to sell it and then what kind of income you could be looking to generate by leasing it out.
Where are you in life right now? Are you close to retirement? Does this make financial sense to start building an investment portfolio of rental homes? There’s a reason real estate is a good investment! Or, what about your next move? Are you planning to relocate soon – and then potentially move back in? If that’s the case, leasing could be the way to go.
1. You need the funds to purchase another home, and they are not readily available. Obviously, this would make a good case for selling instead of leasing if you do not have enough equity in your current home or cash in your account to acquire another home or place to live once you lease out your home.
2. The rental market isn’t good and would not produce a positive cash flow. While this should always be a top consideration, the rental market in this area and across the nation looks to be quite favorable at the moment.
3. You don’t have the funds to carry two mortgage payments during vacancies. If this is the case, leasing may not be for you.
4. You don’t want to be a landlord! (I would caution you not to weigh this factor too heavily, as Property Management companies are readily available and able to handle all aspects of this duty for you! From leasing, to securing a renter who is well vetted, to handling any and all maintenance calls, property management companies do it all for a fairly small fee.)
1. Tax benefits! Did you know taxes on rental income are comparable to those of personal income? This, along with the various deductions available to you, should you choose to lease, make it an attractive option. Basically, any expense associated with leasing your property out can be deducted. This even includes property taxes, repair and maintenance costs, and even home depreciation and upgrades each year.
2. The market right now is HOT for lease properties! With 3BR/2BA Homes in Rockwall going for as much as $2,000 to 2,600 per month on average, and nearly as much as that in surrounding areas, depending on location and condition of the home, leasing can be well worth your while. Consider this! Dallas rents have increased 0.2% over the past month and Rockwall rents 0.6%. Compared to the same time last year, rents have increased a whopping 15.3% in just ONE year! This all according to the National Apartment List Rental Report.
3. Finally, leasing can be a great option to build up your retirement income, especially if your rental income is higher than your mortgage payments and other expenses combined. You will want to weigh the possible income of leasing out your property against what you stand to gain in the stock market, of course. But still, real estate is a great investment for a reason! Also, you could start with one home and use the profits from that lease property to then purchase another and then you’ve got a pretty nifty start to your very own investment portfolio.
If you’re thinking of making this big decision and you have any additional questions or concerns on your mind – or if you want someone to run the numbers for you to help make the call, I am happy to do so!
Whatever you decide, I can assist you with the sell of your property or help you make the move to lease it.
Between our stellar Residential Group and Property Management Team, we are always happy to serve you however we can or to provide complimentary evaluations and market reports, advice or any other type of support as you contemplate your next move!
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